The Global Competitiveness Index and other ways to measure progress

By Katy Wilson

The Global Competitiveness Index (GCI), developed by the World Economic Forum, measures and ranks economies in terms of their competitiveness, defined as “the set of institutions, policies and factors that determine the level of productivity of a country”. The details of this ranking and descriptions of the competitiveness landscape of individual economies are detailed in The Global Competitiveness Report, an annual publication designed to provide a “platform for dialogue between government, business and civil society about the actions required to improve economic prosperity”. This year the report covers 144 countries, which together represent 98.3% of world GDP. The GCI, in calculating competitiveness, combines 114 indicators under 12 pillars (shown in Figure 1 below). For more details on the methodology for compiling the GCI go here.

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In the 2014-2015 report, the 35th edition, innovation and skills are highlighted as being particularly important in influencing competitiveness, key attributes needed in the aftermath of global economic crisis. Alongside a recovering and unsettled economy, conflict and growing wealth inequality pose significant barriers to sustainable and inclusive growth, themes the report prioritizes. Political will and cooperation are of utmost importance in seeking a more resilient and fair global economy.

Sub-Saharan Africa is a region performing the worst in terms of global competitiveness. The top ten most competitive economies in SSA are:

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Of these only the top three occur in the first half of the league table and African countries fill 15 of the lowest 20 spots. Areas in need of improvement include health, education and infrastructure. A significant threat highlighted is the growing youth population – “by 2035, more people will be reaching working age in sub-Saharan Africa than in the rest of the world put together”.

The GCI has come under criticism for being opaque in its definition of competitiveness. On the one hand conflating it with productivity and prosperity while on the other having a high competitiveness score does not necessarily mean the country and its citizens are more prosperous than others. Instead the indicators are seen as being representative of WEF’s neoliberal politics. The WEF did, however, recently release The Inclusive Growth and Development Report, which engages with discussions to improve or develop new models of economic growth and development to expand social participation and benefit sharing. The report, which covers 112 economies, seeks to improve our understanding of how countries can use a diverse spectrum of policy incentives and institutional mechanisms to make economic growth more socially inclusive without dampening incentives to work, save and invest. [Read more…]

Predicting the future under climate change: trouble or blue skies ahead

ID-10066027Several recent publications have explored how the world will transform under climate change, both physically and in terms of our society. And the picture is complex, not helped by the difficulties in trying to predict both global and local changes. Conflict over resources is predicted to intensify but this will be location-specific, for example some areas of the world will see an increase in the amount of land suitable for agriculture while others, often in poorer and more farming-dependent regions will see a decrease. A new global calculator and accompanying report, however, presents more positive findings – that we can be prosperous and combat climate change simultaneously.

Not surprisingly, we seem to have become more fixated on trying to predict the future since the words “global warming” were first uttered and such endeavours are becoming more critical to driving high-level negotiations and planning for a future that is difficult to imagine. Despite the science, projecting patterns and trends into the short- or long-term is open to significant assumptions and sensitive to a huge number of factors, meaning it is far from accurate. That said such efforts to predict the climate and its impact on farming, natural resources, energy use and society are incredibly valuable in opening our eyes to what the future may hold, what trade-offs we may have to make and why we need to act now.

A paper released late last year entitled “Global Agricultural Land Resources – A High Resolution Suitability Evaluation and Its Perspectives until 2100 under Climate Change Conditions” uses computer-based estimations of global agricultural suitability to grow 16 food and energy crops based on climatic, soil and topographic conditions. Authors compare land suitability for these crops between the periods 1981-2010 and 2071-2100 (under climate change scenario SRES A1B). Overall agriculturally suitable land increases by 4.8 million km2, when protected areas and dense rainforest are excluded, but the majority of this additional land is only marginally suitable. While cropland is estimated to increase in the northern hemisphere (in such countries as Russia, China and Canada), land suitability as well as number of cropping seasons is predicted to decline in tropical areas in the southern hemisphere. At present, Africa has the highest levels of land suitable for farming that is not currently under agriculture (some 20%) but much of this land is rainforest, grassland or savannah, and in the future reductions in the number of cropping seasons and declining land suitability will likely limit this potential expansion. Indeed the highest absolute net loss of suitable farming areas under this climate scenario is predicted to occur in sub-Saharan Africa.

This is particularly worrying in light of a different prediction: in a 2011 FAO publication, author Bruinsma estimated some 1.2 million km2 of land will need to be converted to agriculture by 2030 to meet demand, and this conversion will largely occur in South America and Sub Saharan Africa. If climate and other environmental conditions in these areas reduce the suitability of land to farming, this could not only re-shape global production patterns but would exacerbate hunger and food shortages in areas already suffering the highest burdens. [Read more…]